Friday, March 12, 2010

Take a leaf out of Punjab Govt’s Book- Revision of Pre-2006 Punjab State Pension

Similar situation of the times of D.S. Nakara case is around us consequent on implementation of 6th pay commission recommendations. A detailed study on D.S.Nakara’s Case is :-

The evergreen D.S. Nakara case judgment confirmed that `Article 14 strikes at arbitrariness in State action and ensures fairness and quality of treatment. It is attracted where equals are treated differently without any reasonable basis. The principle underlying the guarantee is that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Equal laws would have to be applied to all in the same situation and there should be no discrimination between one person and another if as regards the subject-matter of the legislation their position is substantially the same. Article 14 forbids class legislation but permits reasonable classification for the purpose of legislation. The classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group and that differentia must have a rational nexus to the object sought to be achieved by the statute in question. In other words, there ought to be causal connection between the basis of classification and the object of the statute. The doctrine of classification was evolved by the Court for the purpose of sustaining a legislation or State action designed to help weaker sections of the society. Legislative and executive action may accordingly be sustained by the court if the State satisfies the twin tests of reasonable classification and the rational principle correlated to the object sought to be achieved. A discriminatory action is liable to be struck down unless it can be shown by the Government that the departure was not arbitrary but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.

In the instant (D.S. Nakara) case, looking to the goals for the attainment of which pension is paid and the welfare State proposed to be set up in the light of the Directive Principles of State Policy and Preamble to the Constitution it is indisputable that pensioners for payment of pension form a class. When the State considered it necessary to liberalise the pension scheme in order to augment social security in old age to government servants it could not grant the benefits of liberalisation only to those who retired subsequent to the specified date and deny the same to those who had retired prior to that date. The division which classified the pensioners into two classes on the basis of the specified date was devoid of any rational principle and was both arbitrary and unprincipled being unrelated to the object sought to be achieved by grant of liberalised pension and the guarantee of equal treatment contained in Art. 14 was violated in as much as the pension rules which were statutory in character meted out differential and discriminatory treatment to equals in the matter of computation of pension from the dates specified’.

Minimum Revised Pension:

The significant question involved in the said aspect is–What constitutes a Minimum Revised Pension in
absence of a single revised scale corresponding to a single pre-revised scale? The question necessitated owing to introduction of pay band by grouping the 29 pre-revised scales into four independent pay bands

What serving employees and post-2006 pensioners get:

In the case of serving employees and Post 2006 pensioners the revised pay in pay band is determined using a fitment table that consists of revised pay for each stage in pre-revised pay scale. Here, it may be noted that pay in the pay band applicable, necessarily correspond with the pay drawn as on 1.1.2006 in  pre-revised scale that was held by serving employee or post 2006 pensioners. In the case of retirement after 1.1.2006, 50% of pay in pay band and 50% of grade pay drawn is assured.

What Pre-2006 Pensioners get:

Whereas, in the case of pensioners retired prior to 2006, in accordance with the modified version of para 4.2 of initial OM dated 1.9.2008 clarified in the OM dated 3.10.2008, 50% of the minimum of the pay band plus 50% of grade pay corresponding to the pre-revised scale from which the pensioner had retired, only has been made entitled as minimum revised guaranteed pension w.e.f. 1.1.2006.

Illustration:- To illustrate, seven Old pay scales starting from S9-5000-8000 to S15-8000-13500 have been bunched as New Pay band called PB-2 with pay scale of Rs.9300-34800 with varied grade pays starting from Rs.4200 to Rs.5400. So, if a pre-2006 pensioner who served in the pay scale equivalent to the pre-revised pay scale of S15-8000-13500 that carries grade pay of Rs.5400 would end up with minimum pension of Rs.7,350/- (50% of minimum in the pay band and grade pay) at par with an pre-2006 pensioner served in the pay scale equivalent to pre-revised pay scale of S-9-5000-8000 that carries grade pay of Rs.4200, who will receive a minimum pension of Rs.6750/- (50% of minimum in the pay band and grade pay)

While a person retiring with bottom of the revised pay after 1.1.2006 will be drawing 50% of the same as revised pension, a similar person retired prior to 1.1.2006 even at the top of the corresponding pre-revised scale, will get lesser pension than the said post-2006 retiree (the qualifying service for the pre-2006 pensioners being 33 years and for post-2006 pensioners, it is only 20 years – which is another aspect of the situation, kept reserved for discussion through a separate article for the time being).

Concept of Initial Pay as per Pension Order of Punjab State Govt:

Under the aforesaid circumstances surrounding the pre-2006 pensioners of the Central Government, at present, there comes an Order from the State Govt. of Punjab dated 22.2.2010, which also follows the recommendations of the 6th CPC. As per the said Order, the full pension in no case shall be less than 50% of the initial pay against corresponding to pre-revised scale in which the pensioner had last worked.

Why initial Pay is relevant to pre-2006 CG Pensioners

Neither Pay Band/Pay in the Pay Band nor Grade Pay element is so crucial as that of initial pay in the revised structure, and ultimately for determining the minimum revised guaranteed pension as per para 4.2 of OM dated 1.9.2008, just like the initial pay as notified vide the Punjab Govt., the revised pay should be the crucial point for the pre-2006 pensioners of the Central Government.

This is so, because, the modified parity aspects had been very clearly specified vide para 5.1.46 of the 6th CPC recommendation and a precedence was set already by the DOP&PW vide their OM dated 17.12.1998 to the extent that 50% of bottom of the revised scale to be minimum revised pension.

The excuse that the 6th CPC revision do not have a single revised pay is totally incorrect, as long as there exists an INITIAL PAY in the revised structure for a serving employee. A loud speaking order has been issued by the Punjab State Govt. to dispel any sort of confusion or doubt that can arise in the minds of disbursing agency even.

Ultimately, while 50% of initial pay can emerge as minimum revised pension for a pre-2006 pensioner retired from the state govt. Of punjab, the same 50% of initial pay must very well emerge as minimum revised/assured/guaranteed pension w.e.f. 1.1.2006 for a pre-2006 pensioner of the central govt.

(Mr.Nagarajan Sundararajan, an active member in GConnect Discussion Board is the author of this article. The views expressed in this article are those of the guest author and are not intended to represent the views of GConnect.)


P.K.Mukherjee said on Wednesday, March 10, 2010, 12:43

For a pre-2006 CG pensioner,the minimum pension is being further reduced proportionately based on the no of years of qualifying service.Is it correct ?


VNatarajan, President, Pensioners' Forum,Chennai said on Wednesday, March 10, 2010, 16:10

Thanks to Shri Sundarar for his nice persenteation and summary of the PUNJAB STATE GOVT ORDER. He has brought out all the implications of this “enlightening order” which must wake uo those in authority in the Central Govt. Govt of India’s pension orders for pre-2006 pensioners are a bundle of controversies and violation of every norm/ rule/ articles of Constitution/ pronouncement of judgements at various times and they are discriminative. The most ambiguous, autocraticeand “authority-less” successive Orders have resulted in numerous disputes to get justice. Mr Sundarar’s concluding paragraph on initial pay hits the “nail very hard” on the heads of those who matter and who appear to pose they are not concerned-as it offers a powerful ever-lasting solution to the pre-2006 pensioners’ problems. Kudos to PUJNAB GOVT for setting their own house in order and for showing the way to setthe CG’s house also in order.

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